You plan to purchase a house for $243,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. Your bank offers you the following two options for payment. Mortgage rate of 6.7 percent and zero points Mortgage rate of 6.5 percent and 3 points Answer the following questions: . . What is the difference in payments? . What is the cost of the points? . Which option should you choose if you evaluation under the non-reinvestment method? O $25.43; $4,062.88; Option 2 O $25.68; $5,832; Option 2 O $25.68; $5,832; Option 1 O $25.43: $4,062.88; Option 1

You plan to purchase a house for $243,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and isnore taxes in your analysis. Your bank offers you the following two options for payment. - Mortgage rate of 6.7 percent and zero points - Mortgage rate of 6.5 percent and 3 points Answer the following questions: - What is the difference in payments? - What is the cost of the points? - Which option should you choose if you evaluation under the non-reinvestment method? $25,43,$4,06288; Option 2 $25.68.55832 Ontion? $25,08,$5,832, Option 1 $25,43,54,06288: Oation 1